statement of financial transactions sft code

Statement of Financial Transactions (SFT) Code

Finance Act 2014 replaced Section 285BA and renamed it as ‘obligation to furnish statement of financial transaction or reportable account’ to widen the scope of specified persons and to introduce various other provisions. In this article, we have discussed provisions of Section 285BA and related Rules.

Definition:

It is a report of specified financial transactions that shall be furnished by a specified person in Form 61A. It is mandatory to submit this report by specified persons to Income tax authorities.

Reporting Authorities:

  1. An assessee; or
  2. The prescribed person in the case of an office of Government; or
  3. A local authority or other public body or association; or
  4. The Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908 (16 of 1908); or
  5. The registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988 (59 of 1988); or
  6. The Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898); or
  7. The Collector referred to in clause (g) of section 3 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013); or
  8. The recognized stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); or
  9. An officer of the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934); or
  10. A depository referred to in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); or
  11. A prescribed reporting financial institution

who is responsible for registering, or, maintaining books of account or other document containing a record of any specified financial transaction or any reportable account as may be prescribed under any law for the time being in force, shall furnish a statement in respect of such specified financial transaction or such reportable account to the income-tax authority or such other authority or agency as may be prescribed.

Transactions to be reported as follows:

Sl. No. Class of Person (Reporting Authority) Nature of Transaction
1. A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act). (a)    Payment made in cash for purchase of bank drafts or pay orders or banker’s cheque of an amount. Aggregating to ten lakh rupees or more in a financial year.

 

(b)    Payments made in cash for purchase of pre-paid instruments issued by Reserve Bank of India under section 18 of the Payment and Settlement Systems Act, 2007 (51 of 2007). Aggregating to ten lakh rupees or more during the financial year

 

(c)    Cash deposits or cash withdrawals (including through bearer’s cheque), in or from one or more accounts of a person. Aggregating to fifty lakh rupees or more in a financial year, if current account and Ten lakh rupees or more if other than current account

 

(d)    One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person. Aggregating to ten lakh rupees or more in a financial year

 

(e)    Payments made by any person of an amount aggregating to – (i) one lakh rupees or more in cash; or (ii) ten lakh rupees or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a financial year.

 

(f)     Cash deposits during the period  01st April 2016 to 30th December 2016 aggregating to ̶ (i) twelve lakh fifty thousand rupees or more, in one or more current account of a person; or (ii) two lakh fifty thousand rupees or more, in one or more accounts    (other than a    current account) of a person.

2. Post-Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898). (a)   Cash deposits aggregating to ten lakh rupees or more in a financial year, in one or more accounts (other than a current account and time deposit) of a person

 

(b)   One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ten lakh rupees or more in a financial year of a person.

 

(c)    Cash deposits during the period  01st April 2016 to 30th December 2016 aggregating to ̶ (i) twelve lakh fifty thousand rupees or more, in one or more current account of a person; or (ii) two lakh fifty thousand rupees or more, in one or more accounts    (other than a    current account) of a person.

 

3. Nidhi referred to in section 406 of the Companies Act, 2013 (18 of 2013); (a)   One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ten lakh rupees or more in a financial year of a person.
4. Non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (6 of 1934), to hold or accept deposit from public. (a)   One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ten lakh rupees or more in a financial year of a person.
5. Any other company or institution issuing credit card. (a)   Payments made by any person of an amount aggregating to – (i) one lakh rupees or more in cash; or (ii) ten lakh rupees or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a financial year.
6. A company or institution issuing bonds or debentures (a)   Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring bonds or debentures issued by the company or institution (other than the amount received on account of renewal of the bond or debenture issued by that company).
7. A company issuing shares. (a)   Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company.
8. A company listed on a recognized stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 (18 of 2013). (a)   Buyback of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to ten lakh rupees or more in a financial year.
9. A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorized by the trustee in this behalf. (a)   Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund)
10. Authorized person as referred to in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). (a)   Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travelers cheque or draft or any other instrument of an amount aggregating to ten lakh rupees or more during a financial year.
11. Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed

under section 6 of that Act.

(a)   Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more.
12. Any person who is liable for audit under section 44AB of the Act. (a)   Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.)

 

SFT Codes:

There are various SFT codes which are as follows

SFT- 001  Purchase of bank drafts or pay orders in cash
SFT- 002  Purchase of pre-paid instruments in cash
SFT- 003  Cash deposit or withdrawals in current account
SFT- 004  Cash deposit in account other than current account
SFT- 005  Time deposit
SFT- 006  Payment for credit card
SFT- 007  Purchase of debentures
SFT- 008  Purchase of shares
SFT- 009  Buyback of shares
SFT- 010  Purchase of mutual fund units
SFT- 011  Purchase of foreign currency
SFT- 012  Purchase or sale of immovable property
SFT- 013  Cash payment for goods and services
SFT- 014  Cash deposits during the specified period

 

 

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